TRALA Pushes Back Against Proposal to Circumvent Graves Amendment
TRALA, industry allies, and some individual member companies were successful in pushing back against Florida legislation (HB 819 and S 976) designed to circumvent the Graves Amendment. With deadlines to act on legislation approaching, S 976 was suddenly added to the agenda for a Florida State Senate Banking and Insurance Committee hearing for April 7th. Opposition to the bill was strong, and the bill was quickly tabled by the Committee, effectively ending consideration of the proposal for at least the remainder of the 2015 legislative session.
The legislation proposed to redefine Florida's old vicarious liability statutes as "financial responsibility laws" which are preserved from preemption under the federal Graves Amendment. They would set Minimum Financial Responsibility (MFR) limits of $100,000 per person and $300,000 per incident for bodily injury and $50,000 for property damage for vehicles leased to non-residents (of Florida) for periods of less than one year. For comparison, the MFR amounts required for privately-owned vehicles are $10,000 for bodily injury to or death of one person, $20,000 for two or more people, and $10,000 for property damage. Additionally, the bills would hold that if the lessee is uninsured or has insurance with lower amounts than the $100,000/$300,000/$50,000 requirements, the lessor is liable for up to those amounts and "up to an additional $500,000 in economic damages only arising out of the use of the motor vehicle."
Courts have ruled that the existing Florida statute is preempted by the Graves Amendment because they hold non-negligent lessors financially liable for the actions of others. S 976 and HB 819 clearly signaled that the intent was to circumvent the Graves Amendment, because of the inclusion of a line that read "The amendments made by this act to s. 324.021, Florida Statutes, are intended to clarify that Florida law imposes financial responsibility, as that term is used in 49 U.S.C. s. 30106(b), for lessors and nonresident lessees of a motor vehicle."
TRALA believes that even with the proposed legislative changes, the statute still would have been preempted by the Graves Amendment. Additionally, a report completed by the Senate Banking and Insurance Committee staff suggested that S 976 is unconstitutional. The report stated, in part, "Application of an additional, higher motor vehicle financial responsibility to nonresident short term lessees may implicate the Privileges and Immunities Clause of the United States Constitution." To see a copy of the full committee report, click here.
TRALA appreciates the work of its individual member companies involved in pushing back against this proposal, as well as the leadership of Ken Armstrong and Chris Dudley of the Florida Trucking Association.
For questions on this issue, contact TRALA's Joe Sculley at email@example.com or by calling (703) 299-9120.